Bakhshi is currently President and CEO of Citigroup Global
Markets Japan Inc., and will assume his new role early next
year, subject to regulatory approval, LSE and LCH said today. In
a 31-year career with the third-biggest U.S. bank, he has run
European fixed income derivatives trading and been chief risk
officer for the global commercial banking business.

“We are hopeful that Mr. Bakhshi’s appointment will lead
to a new culture at LCH.Clearnet,” Peter Lenardos, an analyst
at RBC Capital Markets, said in a note to investors. “Mr.
Bakhshi’s task will be focusing LCH.Clearnet on capitalizing on
growth opportunities and achieving a material increase in profit
margins.”

Bakhshi, who has an MBA from Queen’s University in Canada,
and a B.Com degree from Delhi University’s Shri Ram College of
Commerce, will also join the executive board of LSE, the
exchange said.

LSE now owns 57.8 percent of the London-based clearinghouse
after completing the acquisition in May. Nasdaq OMX Group Inc.
increased its stake in LCH to 5 percent from 3.7 percent as part
of the deal, which valued LCH.Clearnet at 633 million euros
($866 million). LCH.Clearnet also operates SwapClear, the
biggest clearing house for interest-rate swaps.

Cut Costs

LCH.Clearnet has room to cut costs in technology and
overlapping systems after LSE’s stake purchase, Chairman Jacques
Aigrain said in September. The two also have areas of overlap
where costs can be reduced, such as in support functions,
Aigrain said, declining to be more specific. The “full benefits
of integration will emerge over three years,” he said.

RBC’s Lenardos said the brokerage wanted to see
LCH.Clearnet focus on “improving operating efficiency, IT
rationalisation, capturing the benefit of OTC derivative
clearing, and the renegotiation of profit-sharing agreements at
SwapClear.”

Clearinghouses cut risk by collecting collateral to back
each transaction, monitoring daily price moves and making
traders put up more cash as losses occur. Traders have to deal
through clearing members, who are typically the biggest banks
and brokerages.